Gary airport to explore getting a private partner
GARY — The Gary/Chicago International Airport will start exploring the idea of a public-private partnership within the next 60 days.
Airport Authority President Nate Williams announced at its Monday morning meeting that an ad hoc committee will be formed to look at a new model for managing the airport as it goes into the future. That could include bringing in an outside management firm.
Mayor Karen Freeman-Wilson, who supports the idea, said the partnership would not be a wholesale privatization, nor would it even look like the effort the city of Chicago is undertaking with its Midway Airport.
“We’re not selling the airport,” the mayor said. “We want someone with a robust balance sheet who will put their money where their mouth is to help develop the airport and its surrounding areas.”
The six-member ad hoc committee will consist of Airport Authority members Cornell Collins and David Bochnowski, two members appointed by the city of Gary, two members of the city’s business community and one at-large member, who could represent the Regional Development Authority if the board chooses to go in that direction. The committee is expected to present its findings to the board in 60 days.
Bochnowski, who will chair the committee, said public-private partnerships have been used in other areas successfully and said that in order to move forward, the idea was worth exploring.
The Authority also heard from a financial adviser that should it need to borrow money toward the runway expansion, it would be able to do a bond issue. Phoebe Sheldon, senior vice president for Acacia Financial Group of Chicago, said the airport could issue $34.5 million in bonds, of which $33 million would be available for capital projects, at a 4.8 percent interest rate.
The bond would be paid back over the course of 30 years with money from the Airport Development zone, Sheldon said. Currently, there’s $24 million in the ADZ, which could be used for improvements to the airport itself down the line.
In other business, the board voted 5-1, with Ross Amundson absent and Bochnowski casting the dissenting vote, to approve a $730,000 supplemental contract with the runway expansion’s construction manager DLZ Corp. The contract was originally set up for four different projects — the EJ&E bridge work, the dynamic compaction, the grade separation and track work – but because of delays with the track relocation contracts between the airport and the railroads; and other unanticipated projects, the original contracts were split up, said Scott Wheeler, project manager with AECom.
Splitting the contracts adds seven months to their length but doesn’t affect the expansion’s $166 million budget, Wheeler said. The original contracts with DLZ were for more than $1 million but were renegotiated to the lesser amount.